Category Archives: conversion

Speed Matters in Lead Management

Often times we import bad habits from old business models as technology and consumer behavior takes us into new paradigms. Mortgage originations moving online is one such scenario.

LeadQual, a leader in lead response and lead qualification–hot transfers–proves that speed matters in lead management:

Does this scenario sound familiar? Bob the realtor gives Cindy the mortgage broker a referral. A young couple hoping to buy their first home. Cindy thanks Bob and suggests she treats Bob to lunch today (hoping to shake out another referral or two). Meanwhile, the young couple’s contact information goes on the yellow tablet next to the phone. Cindy thinks, I will call them tonight when they are probably home from work. Cindy proceeds to finish a few files in process, takes Bob to lunch, calls a few of her other referral partners now that Bob has put them top of mind. Cindy finally heads home from work, "oh, shoot!," she exclaims. "I forgot their number–oh, well I will call them tomorrow."

This might work, sometimes. More and more frequently I would venture this is a lost deal. Why?

Here is what is going on in the back story: The young couple has already pulled their credit reports and scores, they went to Zillow and found out what the home they want is probably worth, and done the math to know what they need in a mortgage. They found the realtor online to show them a couple of properties they have already pinpointed. Now they are waiting on the realtor and you to get your butt in gear.

No calls??? They get home and decide they are tired of waiting.

The couple goes to LendingTree.com at 7:00 pm after dinner with all of their information. They fill out the mortgage qualification form and hit submit.

Ten minutes later their phone rings. Hi, this is Jeff from Quicken Loans

The couple has a 20 minute informed conversation with a highly motivated and friendly loan officer, but insists that they are going to be prudent and wait for the other offers to compare with the three Jeff gave them.

Back to Cindy the mortgage broker. Cindy, like the other three mortgage brokers that got the LendingTree lead referrals make their call the next day. As they fumble along trying to make contact and tell them they will talk to their lenders and get right back with them–Right just like yesterday, huh?

This deal was gone last night and they are done taking mortgage calls. Don’t believe it? The California Association of Realtors reinforces this fact with its survey that affirms that 78% of consumers pick the first agent they talk to.

Speed matters! Get My Next Lead is your secret weapon when 5 minutes is the difference between Deal or No Deal.

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Commitment Can Stage Disaster of Consistency!

I snapped this picture as I sat down to one of the sessions at the recent Loan Toolbox Business Plan 2008. My first thought was, “this is great fodder for a post on upgrading your lead management system to tackle a tougher mortgage market.”


Lead Management System?
However, as fortune would have it my schedule prevented the original post. As is often the case in life, misrouted paths lead us to better things. And such is the case with this post.

On my latest trip to San Diego, I visited with a colleague and friend, David Schneider of ZipSearch!. During our chat I noted a book in his office that I have been meaning to pick-up: “Influence: The Psychology of Persuasion,” by Robert B. Cialdini, Ph.D. I mentioned my interest in the book and David said, “take it with you for the plane ride home.”

I did. And that has made this post all the more important for your success!

Cialdini’s book is a powerful tool (that means Buy It! ) in any sales person’s arsenal. Ahead of you getting the book and tying back to the photo above, I want to highlight one important Cialdini principle: Commitment and Consistency–Hobgoblins of the Mind. Cialdini quickly explains, in this chapter, this mental and behavior barrier:

“Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment.”

Boy, is that true!

I see a lot of old “systems,” like the one in the picture above, that worked in the heyday of the mortgage refi boom.

Sloppy systems that were good enough to catch a spoonful of water in a tsunami.

I hear day in and day out, “I only take referrals.” Then without even taking a breath, “yeah, the market is tough and my production is down,” yet loan officers refuse to take a referral from the Internet.

That’s right! A referral.

A consumer raising their hand to be called–if that isn’t a referral, I don’t know what is. Sure, you have to compete, but it is far more profitable than staring at your phone hoping some one will ring it to pay your mortgage this month.

Unfortunately, many are trapped in their minds and behaviors, as Cialdini predicts:

“When it [consistency] occurs unthinkingly, consistency can be disastrous.”

“…people will hide inside the walls of consistency to protect themselves from the troublesome consequences of thought.”

Are you going to take control of your success in this market? Or, huddle in your walls of consistency until you have to find a new profession?

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Putting Love IN the Game

Last night, I had the pleasure of experiencing Roy Firestone. What a great way to wrap up a week with thousands of loan officers motivated, even in a down market, to grow their business! 

During this memorable final evening at the Loan Toolbox Business Plan 2008 conference I took away a key concept that I want to share with you. This is an idea that will enrich your business and your life.

Loving what you do–you have probably heard this advice. Encouraged to take a walk-about in life and find that thing that you are passionate about and make it your business. Face it, that can be hard to do. Do you really think that mortgage professionals are passionate about taking 1003s and funding mortgages. No, of course not.

Let me alter this phrase a bit and I bet I can find what you are, or can be, passionate about:

It is not as much the love of the game as it is the love IN the game.

My guess is that you are passionate about helping people obtain the dream of owning a home or helping them get back into a stable financial position. This is about putting love in the game. If you are looking for a great example take a look at how Capt. Denny Flanagan puts love in his game, in one of the worst customer satisfication industries, the airlines, puts love in his game.

Stop focusing on how your job is mundane or routine. Stop focusing on how your commissions checks are lighter than six months ago. Focus on putting loving into the game. Sharing that love and passion with each and every client and all those negatives will go away. Your job will no longer be mundane or routine. And your commissions will come roaring back, bigger and better than ever.

Put love IN your game today!

Lead Quality Decline or Market Change?

There has been a bit of discussion over "declining" lead quality. Of course, it is easy to lay the blame of declining app and funding rates at the feet of lead providers. I must admit this was my initial reaction.  However, I then got curious and decided to think a bit broader and dive into the data from our client network and tie it to market news during the period of decline.

Here is the chart:

The most notable observable points in this summary is that lead providers tend to stay very close to their general trend line; however, there was a general trend of decline on or about August 18, 2007. I would also suspect as we look at final September data we will see all of the lead providers returning to their typical trend lines.

So, I am not certain that the general assertion that lead quality has declined over the past several months is supported by market data.

However, if you do make the hypothesis that there has been a sudden precipitous decline in lead quality something must have changed–methodology, market, or consumer. We often assume and stop at lead generation methodology. Did lead providers radically alter their techniques and methodologies on August 18, 2007? No, but your application rates did decline in the short-term.

Something obviously changed. That leaves market conditions and consumer behavior. This is where I put my chips (I am currently in Vegas and down $100).

On that day, the mortgage market was being shook to the bone by Countrywide’s announcement they were tapping a credit line to fund loans. Notice the relative correlation between the Countrywide stock trend line and the lead provider application rate trend lines. At the same time, general news and panic media coverage is shaking the confidence of the consumer. Then, the for the triple threat–loan programs are disappearing for the majority of the borrowers needing financing and FHASecure has not arrived yet.

This is what happened to lead conversion rates. Not poor marketing, but poor market conditions and consumer confidence. They inquired, but got shocked, paralyzed, or left without a program.

The ironic part of this story? As rates stay flat, the mortgage market stabilizes, confidence returns, and programs come back, who is going to write about the dramatic, mysterious improvement in lead quality?

By the way, hopefully you have a good lead management system that is allowing you to manage these consumer inquiries over this longer sales cycle because they are ready to apply now!

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Cold Calling 2.0

Aaron Ross, creator of Salesforce.com’s $20 million tele-prospecting team, is teasing out the concept of cold calling 2.0. Now, besides the tired nature of the 2.0 idiom, I am a bit interested.

The Internet has caused an odd brand of customer engagement that is not cold calling, but has many of the challenges and pitfalls of this brand of sales. Here are a few of the elements that I think are central to a discussion of "cold calling 2.0":

  • Automated account (consumer) context generation
  • Demand-based lead inventory and sales capacity management
  • Intelligent lead distribution
  • Prospecting automation
  • Effective prospect qualification
  • Effective transfer methodologies
  • Trust building (foreshadowing and fulfilling promises)
  • Agent fatigue
  • Account (consumer) fatigue

But, until a good discussion can be flushed out you can start building your tele-prospecting team today. Take your newest 10% and you bottom 10% and put them on the prospect team. They should warm and pre-qualify each lead and transfer to top performers.

This introductory tele-prospecting team build two important foundation principles within the sales force:

  • Performance is rewarded
  • Creates a sense of appreciation (value) for leads

Happy hunting!

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Bill Rice talks about Kaleidico with Online Mortgage Blog

I spent time with Owen Raun of the Online Mortgage Blog talking about the history of Kaleidico and some of the advantages Internet lead buying and our lead management software brings to a declining market.

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LendingTree’s Secret to Industry Leading Conversion Rates

Mission 007, The Extraordinary Experience was LendingTree’s context for this year’s Partner Summit. However, neither the mortgage nor the lead generation business is synonymous with ecstatic consumer experiences. In fact, recent media coverage and tests from consumer reports tend to indicate an appalling blender of unfulfilled promises, missed expectations, and maybe even deception.

In contrast, at the recently concluded LendingTree Summit, consumer experience seems to be the strategic focus of LendingTree under new CEO C.D. Davies. Unfortunately, reversing the tarnished perception of a battered mortgage industry, where only 11% (according to one summit presenter) of customers will chose to return to the same mortgage company, will not be an easy task.

Emphasizing Consumer Experience

Certainly the since of urgency, priority, and a focused framework for execution has been set forth by LendingTree. Built on a pyramid of service, value, and trust, Jessica Ordeman (Senior Director of Consumer Experience), laid out the roadmap that LendingTree is confident will create a more positive consumer experience, higher quality inquiries, and ultimately repeat customers and promoters.

Focusing on Service to Create Loyalty

In the domain of service, a notable paradigm shift was presented. A transition from assessing consumer experience as satisfaction to one of loyalty. To do this LendingTree will begin using a concept, used by other major consumer brands, known as a net promoters score. This score relies on one fundamental question: Would you recommend us to a friend, family member, or colleague? The assessment on a scale of 1-10 is then compiled into the percentage of promoters (9,10) and the percentage of detractors (0-6). The net of that number is the net promoters score (NPS).

How is LendingTree doing today? Based on all consumers that closed a loan that score is 53%, which is considered very strong when benchmarked against other highly regarded brands like Southwest Airlines, at 60% and Enterprise Rental Car, at 53%. However, when assessed against all consumers that submitted an inquiry for a mortgage to LendingTree that score dramatically plummets to -20%. This number should strongly illustrate the logic underlying many of the changes and commentary coming from LendingTree’s leadership.

This current negative NPS certainly underlines comments from LendingTree Executives during the summit concerning the strategy for managing the lender network and recent announcements of price increases.

Closers create loyalty. Closers create repeat customers. The effects of a network full of Closers advantages the consumer, LendingTree, and the lender. Consequently, if a lender is not managing the LendingTree consumer inquiries and experience effectively; therefore, not closing–then the new price structure will not work for their mortgage business. And LendingTree is okay with their logical departure from the network.

Ensuring Value and Expectations

As the strategy presentation moved to value, the message was clearly a need for reliable expectations and then delivery. This seems a strong contrast to the current online proliferation of unrealistic payment teaser advertising. The mechanism for driving consistency and compliance? Offer standards. Standards that are monitored and enforced with advanced analytics. Keeping tabs on discrepancies in comparative offers and the initial versus final offer. The bottom line was obvious. LendingTree’s research shows that speedy delivery of an offer and consistent delivery on that promise converts and creates loyalty.

Trust is the Foundation to Loyalty

Trust seemed to be the most challenging of the three initiatives to articulate. I think this stems from the relative uncertainty of what builds trust online. A whole new channel for the concept of trust.

The most obvious first step was to allow consumer the ability to verify the lenders that are directly responding to their LendingTree inquiry. This was referenced as an improved lender verification process. This process was labeled as a direct response to the increasing impact of credit trigger leads to crush the consumer with unsolicited calls for mortgage services.

Now it’s about Execution

All in all, I was impressed with the new cast of leadership and strategic thinking that LendingTree is bringing to the market. It seems consistent with my philosophies for the new market, presented over the last year–put the consumer at the center, create expectations you can deliver on, effectively manage the lead experience, and create transparency. Now the proof is in the pudding. What will execution look like?

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